EFY REPORT

EMBEDDED SYSTEMS
Can India Move from Implementing to Initiating Products?
Currently, as most users are outside India, they decide what is needed next. In future, though, India can migrate from the role of product implementer to product initiator by focusing on the growing domestic market
and making it production-ready in all respects for commercial success.

The embedded ecosystem
The players in the embedded space include system integrators, IC design houses, electronic design automation vendors, board design houses, test houses, software tool providers, and embedded software and application software providers. Most of the semiconductor manufacturers are involved in VLSI chip design and embedded software development. Indian companies are developing embedded products in consumer, industrial, telecom, automotive, computing and medical space for local as well as export markets. Transnational global companies like Cisco, Juniper, Honeywell, GE, Bosch, Delphi, Visteon, Continental and many more have set up their embedded development centres in India. In addition, design services companies of India like Wipro, HCL, Satyam, Mindtree, L&T, TCS, Tata Elxsi, KPIT Cummins and many more are doing embedded software and hardware product development in India for global accounts.

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UMa BanSal

onsumer electronics and telecom companies are starting to recognise the importance of localisation of their products, with India emerging as a big market for these products. Given this, the Indian embedded solution providers are in a unique position where they can add value not only in the development process but also in the
w w w. e f y m ag . co m

conceptualisation of new and unique products. Currently, most of our embedded activities pertain to products developed for foreign markets. And most Indian embedded system houses are engaged in sub-system architecture, hardware and software implementation, testing and integration stages of the value chain. India can move up the value chain by conceiving and specifying products (as against service), system architecting, system validation

India’s forte: embedded software
The show stealer so far has, of course, been embedded software development. “Embedded software develope l e c t ro n i c s f o r yo u • a p r i l 2 0 0 9 • 4 3

companies will first look at outsourcing and then increasing their own headcount. this will create a big opportunity in the local context. Texas Instruments India. HCL Technologies and Mindtree in working with the global design ecosystem underscore our country’s strengths in the embedded software space. hardware board design and embedded software) in In- Impact of recession We cannot ignore the fact that the industry is right now in the midst of a slowdown.” says Ganesh Guruswamy. Indian companies are migrating Market size and forecasts According to an ISA-Frost & Sullivan report published earlier. As most of the users aren’t in India. Freescale Semiconductor from being centres of resource augmentation to product innovation and design centres. In future. vice president-emerging markets region and director-India Design Center. These companies are now at a stage where they can both conceive and develop products for the global and Indian market. though. e f y m ag . Access to local customers driven by domestic consumption will enhance product knowledge and further catalyse maturation of the Indian companies to be able to do complete product development. —Ganesh Guruswamy. ment companies in India have created a strategic advantage for themselves. vice president and country manager. Globally. Engineers here can become product initiators (deciding what product is to be done). Universities can play a big role here. the total number of design starts is dropping. this means there is a cost pressure on the outsourcing.EFY REPORT Embedded software development companies in India have created a strategic advantage for themselves. However.600 technical people. by migrating from the role of product implementer to product initiator. says that if we talk about our place in the value chain for an embedded system. STMicroelectronics. The captive embedded software companies include semiconductor companies that follow the IDM or fabless model and develop the software required for chips and reference boards. OEMs also develop software for their own products. It could mean an opportunity for the Indian design service companies. Indian companies today are more of system solution/product implementers. The success stories of large Indian software services companies like Wipro Technologies. The embedded software market will expand as non-captive companies move up the value chain to offer more high-value activities around middleware and develop applications for them. outside teams define what is needed next. Embedded software is required by varied industries in the non-traditional areas of discrete manufacturing and industrial process control as well as common industries like automotive electronics. vice president and country manager. the semiconductor and embedded design industry (including chip design. The total embedded software market was worth $5. there is a positive side too: Once the market starts bouncing back. we can move up the value chain. with several players operating in India. which will give further boost to innovations. Moving up the value chain Vivek Sharma.9 billion in 2008 and employed 125. In turn. The embedded software sector can be classified into captive and non-captive units. Freescale Semiconductor. The non-captive companies are third-party embedded software developers. co m . and do highend consulting.” informs Praveen K. hardware/board designers or the third-party VLSI design companies that provide embedded software solutions as part of their service offerings. Embedded software contributed approximately 81 per cent to the overall revenues and 82 per cent to the overall workforce of the Indian semiconductor industry. drive product strategies and roadmaps. As the local market grows in coming years. w w w. “The last few years have seen a huge growth in the number of small and innovative companies doing complete design of innovative embedded products. Customers are not yet canceling contracts. This has led to a drop in the outsourcing opportunities. but they are taking longer to decide and discretionary spends have slowed. someone has to conceive the ideas. computing products and consumer electronics. director-DSP business development. Tata Consultancy Services. And when we innovate. The shift has already started: The embedded systems industry in India is undergoing a gradual change from a software-driven outsourcing model to one increasingly focused on growth and development of the domestic market. There are also a few EMS and ODM companies that provide embedded software development services specific to the products 4 4 • a p r i l 2 0 0 9 • e l e c t ro n i c s f o r yo u that they design and manufacture for clients. A similar trend exists in the captive design centres of multinationals and Indian service companies. Ganapathy. The embedded software market is fragmented. They are becoming accountable for more and more of complete product design/delivery/ownership.

local semiconductor consumption The data for year 2008 as per ISA report was $6 billion for TM and $2. which is roughly half of the growth rate exhibited before. the MSP430 platform of ultra-low-power 16-bit RISC mixed-signal processors from Texas Instruments (TI) is good for battery-powered measurement applications. 8.EFY REPORT As most of the users aren’t in India. Qualitatively. while its OMAP platform delivers a variety of high-performance application processors with extremely w w w. The vast majority of the embedded processor market remains microcontroller units (MCUs). e f y m ag . So we clearly see the impact of recession on the local semiconductor market. making MCUs also the largest dollar-volume segment of the four embedded processing technologies. Proprietary to commercial software 4. the semiconductor industry in India had grown 25-30 per cent. Medical electronics. MRI and diagnostic devices. What we consume in India has two components: 1. developers are working on the latest ultrasound.. Embedded CPUs. set-top boxes. —Vivek Sharma. STMicroelectronics include automobiles (where we are seeing innovative products at breakthrough price points such as the Tata Nano). Fixed-function to multi-function devices 2. co m Growth drivers Demand-pull in the embedded space stems mainly from: 1. If the mobile phones are manufactured here in India. ‘Small’ and ‘low power’ are the buzzwords. Emerging trends Consumer electronics applications are digital TV sets. For instance.e. Whatever we are using in India.25 billion in 2005. The embedded solution providers are constantly innovating to match these requirements. e. An ISA-IDC report observes that the power sector reforms in the Indian industry will help the embedded systems business with overall infrastructure upgrade and introduction of sophisticated electronics equipment for the industry.” informs Sharma. the semiconductor content inside them is TAM. Semiconductors which are being used inside electronic items made in India. particularly portable monitoring devices In consumer electronics. “given the prevailing slowdown. dia generated revenues of $3. Other areas that will see growth . digital entertainment will be a high-growth area. Security and surveillance will see strong growth with increase in government spending. which are low-cost autonomous embedded processing units used in embedded applications having low-end processing requirements. vice president-emerging markets region and director-India Design Center. Security and surveillance including biometrics 3. DSPs and FPGAs all typically provide higher levels of processing performance than MCUs and command higher average selling prices. Another growing trend is the move towards small form-factor designs which can be upgraded with minimal application efforts. i. digital still cameras and smart phones. embedded processors for implantable medical devices. Total market (TM) for semiconductors. Limited. Communication 4. growing at a compounded annual growth rate (CAGR) of 30 per cent during the forecast period. Companies like LG are producing 4 6 • a p r i l 2 0 0 9 • e l e c t ro n i c s f o r yo u designs in India not only for the local market but also for the world market. energy saving appliances and alternative energy devices like inverters and solar cells. the semiconductor content that goes inside it is TM. fixed-line bandwidth to high-bandwidth wired/wireless lines Processing needs range from highperformance multi-core processors for applications like base stations and medical image processing to energyharvesting..g. and could reach $14. we are seeing migration in technology from: 1.5 billion for TAM in India. network cameras. but exist in smaller unit quantities. In medical electronics. mobile phones. However. In this area. for both local and overseas markets. digital video recorders/home video servers. outside teams define what is needed next. videophones. Analogue to digital media 3. All the semiconductors that we use in India irrespective of whether we are manufacturing them here or bring them from abroad 2. let’s look at the local market from two perspectives. so surely there is impact on design centres which are designing for foreign markets. digital camcorders. DVD players. PDA cameras.and 16-bit to 32+ bit processors 5. And it had been growing annually at this rate for the last few years. the ISA has revised the estimated growth rate for the calendar year 2009 to 13 per cent. Defense and avionics 5.42 billion by 2010. and further to $43 billion by 2015. Most of the design centres aren’t hiring any more. In year 2006. Total available market (TAM) for semiconductors. Consumer electronics 2.

software-defined radio. the local design team should make it a fully packaged. At system-level trend could be towards “More then Moore” (integration of diverse and unrelated technologies like silicon VLSI. director-DSP business development. Digital security and surveillance is one of the hottest applications in the embedded arena benefiting from the multicore phenomena. —Praveen K. point-of-sale systems. more often than not. live-stock identification and identification-based vehicle security. OMAP from TI 2. director. they are also responsible for their ‘IP packaging. making it easier than ever to access information and media. networking and e l e c t ro n i c s f o r yo u • a p r i l 2 0 0 9 • 4 7 High-end designs churned out of India Poornima Shenoy. productivity and multimedia experience. from MindTree TI’s scalable OMAP35x portfolio of devices is available for manufacturers wanting to redefine the standard for advanced user interfaces. biosensors. a. Communication interfaces.. smartcard-based rural banking and micro-finance. Ganapathy. Also. these blocks will need to. edutainment (eDictionaries) and portable consumer entertainment devices like portable media players and portable TV sets. says that most (if not all) of the companies are responsible for some design blocks. be used in more w w w. NXP Semiconductors. the latest security and surveillance solutions need to be able to capture and process security video in real time. Also. intellectual property (IP).S. Sharkfin from ADI 3.a. like Bluetooth. Murthy. Old surveillance systems requiring human monitoring are rapidly being replaced with intelligent surveillance systems. independently usable block. Texas Instruments India low power consumption. Wireless IPs from Ittiam and Wipro 4. And.” says Dr N. co m . Web browsing. “New applications would be epassports. highpower components and MEMS in a single system-in-package) rather than “More of Moore” (integration of more and more transistors on a single silicon system-on-chip and operating at higher frequency). president of India Semicoductor Association (ISA). IP-based communications. patient monitoring and other medical applications.’ Some of the technologies (IP) championed from India include: 1. at the global level. as complete products are increasingly being developed in India. smart home media controllers. e f y m ag . new business initiatives.EFY REPORT Access to local customers driven by domestic consumption will enhance product knowledge and further catalyse maturation of the Indian companies to be able to do complete product development.k. than one design of that company. This means that in addition to just developing a block. Freescale India design centre has completed many designs in the domains of wireless. Target applications of OMAP devices include portable navigation devices.

Many engineering colleges are not equipped with tool-kits that the students need to be trained on for joining the industry. director of marketing. embedded software and board design. the embedded space is witnessing a gap between the skill set required and the skill set available. This MCU is well-suited for a broad range of industrial networking. Inadequate support from government for the capital-intensive semiconductor industry is affecting feeder segments like chip design. Talent crunch. architecture and productisation levels as yet. was created by the India team in a record time. No doubt. Though this is happening. Indian companies need to provide start-to-finish services. we don’t have the required talent at product specification. We need to match or exceed the pace of developments that are happening in other countries such as China and Taiwan.EFY REPORT microcontrollers. co m . low product development cost. says that for embedded systems players. More than 70 per cent of the development cost for complex systems such as automotive electronics and communication systems is due to software development and test. Currently. ——Poornima Shenoy. They are metamorphosing from labour cost arbitrage to being true contributors to product innovation. The MCF5225x. A growing phenomenon is that of companies either investing in new design operations in India or significantly expanding their existing facilities. In some areas. High investment costs for R&D need to come down. But this is not without challenges The challenge and opportunity lie in the complexity that is involved in em4 8 • a p r i l 2 0 0 9 • e l e c t ro n i c s f o r yo u bedded design. At the same time. Solution to talent crunch The solution to talent crunch lies in industry and academia collaborations—engineering colleges providing students with hands-on experience. embedded expertise including IP solutions. and established working models locally and globally. e f y m ag . analogue. the code size is doubling every nine months. it is too slow and too little. as the pressure mounts on foreign companies to reduce costs of product development. And if we wish to move up the value chain. building/ lighting control and medical applications that require high performance and connectivity options (Ethernet and USB). the local design team should make it a fully packaged. software and board design. This is because the engineering course structure is many a time not in line with industry w w w. eInfochips. In addition to just developing a block. There is also the question of how much the local ecosystem has evolved over the years to develop embedded products end-to-end. There has to be a talent transformation from traditional PC applications to embedded designs. rather than the number of engineers. we need to make sure that we have the right resource and skill set levels within the embedded space—such as digital/analogue chip design. The industry requires expertise in digital. president of India Semicoductor Association (ISA) What advantages does India offer? Nirav Shah. development and productisation. independently usable block. India offers the advantages of large domestic market size. Freescale’s latest MCU. There is an exponential increase in software complexity. The Indian embedded system community needs to change its mindset from project focus to product focus.’ Hence there is a need for training and real-life design exposure before they can become productive. An engineering student in India would require a fair amount of training to reach the level of expertise that his counterpart in the West would reach with six months’ training. This will contribute to the further expansion of the talent pool and maturation of skill sets in Indian design companies. which will be a true differentiator in the long run. The fact that large MNCs are setting up manufacturing here is a testament to the fact that the domestic opportunity in India is growing and there will be a huge need for talent in the areas of embedded systems design. but the issue is the number of readily employable engineers. eInfochips did the product design (for a US customer) of a transcode device used for video streaming application. they are increasingly looking for offshore partners who can provide costeffective services. India is equipped with the required talent at design implementa- tion and test levels. Institutes have been churning out engineers but they lack industry exposure and are not ‘design-aware. It involved 16-layer board design with around 4000 components including more than eight high-speed processors. Additional focus is needed. In order to exploit the opportunities. Large Indian companies are moving towards higher-end activities in the embedded value chain with increased expertise in specific domains.

There will be a strong focus on increasing margins and adopting business models which are not linearly dependent on the manpower. the industry and the academia to encourage applied semiconductor research 2. co m .. There should be more stress on teaching the fundamentals and concepts. director. Several companies have already taken proactive steps to increase the number of VLSI/embedded-trained engineers. TI India supports the academia through its University Programme. A curriculum that has more of a practical orientation in addition to having theoretical perspective is required. And it is necessary to arrange for guest lectures from industry veterans.S. live-stock identification and identification-based vehicle security. e f y m ag . Setting up of technology business incubators (TBI). —Nirav Shah. A public-private partnership (PPP) model involving the government. IP creation will lead to royalty-based models as well as high-end expertise in specific domains in the embedded software value chain. enhancing the standard of semiconductor laboratories to match with industry standards and setting up semiconductor-related research centres in special economic zones 4. all levels of software development. The role of government funding is 85-90 per cent of the funding available to university lab research 2. new business initiatives. it stands for ‘Universities and TI. Participation of the industry beyond just providing tools Road to success The growth in the next four years for the embedded service industry will be higher in companies offering focused solutions on industry segments like automotive. The future of embedded software looks bright given the exceeding pressure on the US companies for time-tomarket and cost. i. Students from engineering colleges are imparted training for four to six weeks.e. Indian companies are investing in infrastructure and building domain expertise. is designed to assist students by building their experience with embedded products. Termed as the UniTI. eInfochips’ university programme. Impetus. These institutes account for around 61 per cent of research papers published in the field of semiconductors The study recommends: 1. facilitating involvement of industry executives in academics and creating awareness about job avenues among PhD holders 5. and help convert potential research ideas into their commercial success 3. Companies that have been providing embedded design services will move up the value chain by building reusable components and undertaking complete system development. so that the students could learn some of the best practices. industrial.’ UniTI is the forum in which TI India interacts with universities and interested technical institutions in the role of a facilitator. Now we do see companies tying up with universities or setting up institutes to equip engineering graduates with the requisite skills. The top seven institutes account for 70 to 75 per cent of the total A significant trend is the move towards small form-factor designs which can be upgraded with minimal application efforts. These institutes have the faculty and dedicated VLSI labs to support high-quality semiconductor-related research 3. Murthy. Steps to enhance research infrastructure by developing dedicated research centres. This is something which is also being recognised by the industry. Having a local manufacturing ecosystem will also boost this industry with end-to-end product development and rollout happening from India. eInfochips research being undertaken in the academic institutes of the country. Performance-based incentives to faculty and research scholars. NXP Semiconductors w w w.  The author is a deputy editor at EFY e l e c t ro n i c s f o r yo u • a p r i l 2 0 0 9 • 4 9 New applications would be e-passports. architecture and training materials. smartcard-based rural banking and micro-finance. —Dr N.EFY REPORT needs. An ISA study on the status of semiconductor related research in Indian universities reveals that: 1. director of marketing. TBIs provide a robust platform for active industry-academia interactions. portable/wireless and consumer electronics.

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